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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS No. 115 of 2019 (COMM)
NKW HOLDINGS LIMITED
Plaintiff
AND
PALADIN SOLUTIONS PNG LIMITED
Defendant
Waigani: Anis J
2019: 27th & 28th November
NOTICE OF MOTION – Security of or preservation of property – Order 12 Rule - 1 and Order 14 Rule 10(1) and (3) – National Court Rules – whether application competent – whether there are real evidence that defendant will remove its assets as at 30 November 2019 – application of court’s discretion
Cases cited:
Banning Trading Ltd v. Max Kombamung (2017) N7056
Rimbink Pato v. Maku Kopylala (2017) N7279
Counsel:
Mr A Mana,for the Plaintiff/Applicant
Mr T Griffiths and counsel assisting Ms E Heagi, for the Defendant/Respondent
RULING
28th November, 2019
1. ANIS J: The plaintiff applied for an order that the defendant pay, amongst others, a sum of K2, 345, 390.53 into the National Court Registry Trust Account pending the outcome of the proceeding. Its notice of motion was contested and it was heard on 27th November 2019. I reserved my ruling thereafter to today at 3pm.
2. This is my ruling.
BACKGROUND
3. This matter is fixed for trial tomorrow at 9:30am. At the trial, the plaintiff plans to establish the existence of a valid oral contract between itself and the defendant, that is, contract to provide meals for a specified period and at a specific rate, to the defendant’s employees who were working at the Manus refugee centers. As pleaded in its statement of claim, the plaintiff says that it operates as the Facility Manager at areas called the West Lorengau Haus and Hillside Haus in Manus Province. It says that houses accommodate refugees and non-refugees. It claims that between 1st January 2018 to 31st July 2018, it provided meals to the defendant’s employees at the rate of K15.00 per meal. It says it rendered a total of 7 invoices to the defendant. In total, it claims a liquidated sum of K2, 156, 853 plus interest and costs.
4. The defendant plans to defend the matter. It plans to argue that there was no such oral agreement reached between the parties at the material time as alleged by the plaintiff. The defendant has also filed a cross-claim. In the cross-claim, it seeks to reclaim a sum of K246, 939 which it says was paid to the plaintiff under a mistake of fact by its agent. It also seeks to recover interest and costs.
NOTICE OF MOTION
5. The main relief sought in the notice of motion is this:
Pursuant to Order 12 Rule 1 and Order 14 Rules 10(1) and (3) of the National Court Rules, and pending determination of the substantive claim in WS 115 of 2019, the Defendant pay into the National Court Registry Trust Account a sum not less than K2, 345, 390.53, which is the amount sought in the Amended Writ of Summons including legal costs incurred by the Plaintiff to date, plus interest at 8% per annum.
EVIDENCE
6. The plaintiff relies on two (2) affidavits, namely, the affidavits of Heath Bruns filed on 14th August 2019 and 20th November 2019. The defendants on the other hand relies on four (4) affidavits, namely, three (3) affidavits of David Saul filed on 23rd May, 4th October and 27th November, 2019, and the affidavit of Phillip Burke filed on 31st October 2019.
ISSUES
7. The main issues, in my view, are, (i), whether the plaintiff has invoked incorrect sources in the relief and therefore whether that renders the notice of motion incompetent, and (ii), whether there is evidence that the defendant will remove its assets from Papua New Guinea immediately after November of 2019.
COMPETENCY
8. Let me refer to Order 12 Rule 1 and Order 14 Rule 10(1) and (3) of the National Court Rules. They read, and I quote in part:
ORDER 12.—JUDGEMENTS AND ORDERS.
Division 1.—General.
1. General relief. (40/1)
The Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating process.
......
ORDER 14.—MISCELLANEOUS POWERS OF COURT.
......
Division 2.—Interim Preservation, etc.
......
10. Preservation of property. (28/2)
(1) In proceedings concerning any property, or in proceedings in which any question may arise as to any property, the Court may make orders for the detention, custody or preservation of the property.
......
(3) In proceedings concerning the right of any party to a fund, the Court may order that the fund be paid into Court or otherwise secured.
9. Let me address Order 14 Rule 10 sub-rules 1 and 3 first because the defendant’s challenge only covers the said Order. The defendant argues that the money which the plaintiff is seeking to secure is not a property within the meaning or purpose of Order 14 Rule 10(1). It also submits that the proceeding does not concern a right to a fund where sub-rule (3) may be invoked. The plaintiff in response did not offer any real challenge to the argument concerning Order 14 Rules (1) and (3). Counsel instead submits that the Court does have powers under Order 12 Rule 1 of the National Court Rules and as such the notice of motion is properly before the Court.
10. I will deal with Order 12 Rule 1 below but in this case, I find as follows. I uphold the defendant’s submission. In my view, Order 14 Rule 10(1) is inapplicable in this instance. The present proceeding is a claim to recover debt based on a purported contract. It is not a claim for or a claim concerning preservation of a property. And I use the same reasoning in relation to sub-rule (3) of Order 14 Rule 10 of the National Court Rules. The plaintiff is not making a claim concerning the right of any party to a fund.
11. Let me address the second source, that is, Order 12 Rule 1 of the National Court Rules. I note that the defendant did not challenge this rule. The plaintiff submits that the rule gives the Court powers to make orders including the relief it is seeking.
12. I am inclined to uphold the plaintiff’s submission on point. Order 12 Rule 1 does give the Court a wider power to exercise in the interim or whilst a proceeding is pending. In this case, I note that the trial and judgment of the Court, are pending. I also note that the relief being sought is not pleaded in the statement of claim. The key wording under Order 12 Rule 1, in my view, is, as the nature of the case requires. This was affirmed by the Supreme Court in the case of Kamali Renali v. Peter Loko (2012) SC1186. The Supreme Court stated at paragraph 9 and I quote in part:
Order 12 Rule 1 in essence allows the court at any stage of the proceedings on the application of any party to make such orders as the nature of the case requires notwithstanding that the applicant does not make a claim for those orders in the originating process.
13. There may be exceptions to the application of Order 12 Rule 1. For example, if there are precise provisions under the National Court Rules that may be invoked in regard to a specific relief, then an applicant must plead that source in the notice of motion and not Order 12 Rule 1 otherwise he or she may face the risk of the notice of motion being dismissed for being incompetent. His Honour Justice David in Banning Trading Ltd v. Max Kombamung (2017) N7056 stated at paragraph 5 of his decision, and I quote in part:
5. Order 4 Rule 49(8) of the National Court Rules requires motions to contain a concise reference to the Court’s jurisdiction to grant the orders specifically sought. Banning relies on Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution. Order 12 Rule 1 of the National Court Rules is a general provision and does not contain a concise reference to the Court’s jurisdiction to grant the relief specifically sought. Section 155(4) of the Constitution is not the source of primary jurisdictional power and cannot be invoked contrary to any provision of the National Court Rules: Peter Makeng v Timbers (PNG) Limited (2008) N3317. The motion is incompetent and in the exercise of my discretion it is struck out for want of form pursuant to Order 4 Rule 49(8) of the National Court Rules.
14. Justice Hartshorn similarly, and in the case of Rimbink Pato v. Maku Kopylala (2017) N7279, stated at paragraph 9 of his decision, and I quote in part:
9. In regard to Order 12 Rule 1 National Court Rules as counsel for the defendants submitted, it is a general provision. Order 4 Rule 49(8) National Court Rules provides that all motions must contain a precise reference to this court’s jurisdiction to grant the orders being sought. Order 12 Rule 1 is not a precise reference. Order 12 Rule 8(4) is the precise reference. I mention also that Order 12 Rule 40 (1)(b) and (c) are not rules applicable to a setting aside application.
15. The distinction here, is that there appears to be no precise provisions where the plaintiff could invoke to seek the relief that it is seeking to comply with Order 4 Rule 49(8) of the National Court Rules. The plaintiff is seeking an order that the liquidated sum that it is claiming in the statement of claim together with interest and its legal costs incurred to date, be paid into the National Court Registry Trust Account pending the trial and the final decision of the National Court. In my view, the circumstances of the case appears to warrant or cause the plaintiff to make a request for such a relief, that is, because of the fact that the defendant’s operation or business in Manus where the plaintiff is part of, is about to come to an end come 30th November 2019 and the plaintiff is concerned regarding its interests in the matter before this Court.
16. I therefore find the notice of motion to be competent.
EVIDENCE OF REMOVAL OF ASSETS
17. I note the evidence of the parties. The parties are at common ground that the defendant will cease its operation in Manus at the end of this month or by 30th November 2019.
18. The first question I would ask is this. Is there any real evidence disclosed by the plaintiff which says or indicates that the defendant will or is about to remove all its assets permanently out of Papua New Guinea? In my view, the burden of proof is upon the plaintiff to establish. Once established, the burden shall shift to the defendant to prove otherwise.
19. I have had the opportunity of perusing the plaintiff’s evidence. In particular, I refer to the affidavit of Mr Bruns filed on 20th November 2019. As a preliminary matter, I note that the defendant has objected to paragraphs 6 and 7 of the affidavit. I heard submissions from the parties on this and I indicated to both counsel that I may address that in my ruling. My ruling is this. I uphold the objection. The main reason is this. The plaintiff is not a person who could depose to an affidavit. Mr Bruns would be that person and he is in fact the person deposing, so to state that the plaintiff verily believes is, in my view, wrong or incorrect. I would disallow the two (2) paragraphs as evidence before me. But even then, or even if I am to allow these paragraphs and consider the affidavit as a whole, I see no evidence by the plaintiff which shows that the defendant is about to or is planning to remove its entire assets come 30th November 2019 or soon afterwards. I note that the defendant is locally incorporated under the laws of Papua New Guinea. I also note that it is a separate legal entity that is regarded under the provisions of the Companies Act 1997. To me, I do not think that it is sufficient to argue that because one of its businesses in Manus is closing down, that therefore means that the defendant is permanently shutting down its operations or will transfer all its assets overseas. I would require more facts or evidence than these. It may appear that the reason why the defendant is shutting down its operation is to do with the contractual arrangement that the defendant’s parent or related company may have with the Commonwealth Government of Australia. However, that appears to be a separate matter which, in my view, would have or has no connection in terms of the allegations, pleadings or the contractual relationship that are alleged in the statement of claim in the present proceeding.
20. I am therefore not satisfied that the plaintiff has proven to my satisfaction that the burden of proof should shift to the defendant.
LIQUIDITY OF THE DEFENDANT
21. In any event and assuming that I am satisfied that the plaintiff has provided prima facie evidence and that the burden is shifted to the defendant (which I have found not to be the case), I note the following. Firstly, the defendant has provided evidence which shows that it does not plan to close down its operations permanently here in Papua New Guinea. Secondly, I refer to the affidavit of David Saul filed on 27th November 2019. Mr. Saul is the Managing Director of the defendant. He attaches evidence which shows that the defendant has a net asset that is estimated at more than K6 million as at 31st October 2019. I also note counsel’s submission that these were not the defendant’s official or certified balance sheet but that it had been prepared for the purpose of the present notice of motion.
22. These reasons or findings, in my view, are sufficient for me to make a ruling without proceeding any further.
SUMMARY
23. In conclusion, I will dismiss the plaintiff’s notice of motion. I am not satisfied that the plaintiff has provided sufficient evidence to establish the basis of the relief that it is seeking in its notice of motion that would warrant the defendant to respond to.
24. Even then, I note that the defendant has provided evidence to my satisfaction that it accounts or assets are financially sound at this present time. And perhaps more importantly, it has also disclosed evidence that even though it will close its operations at Manus, that it has no immediate plans to completely shut down its operations in the country or that it plans to transfer all its assets overseas in the near future.
COST
25. Cost award is discretionary. I will order cost to follow the event, that is, I will order cost of the notice of motion to be paid by the plaintiff on a party/party basis to be taxed if not agreed.
THE ORDERS OF THE COURT
26. I will make the following orders:
The Court orders accordingly.
_______________________________________________________________
Corrs Chambers Westgarth: Lawyers for the Plaintiff
Ashurst PNG Lawyers: Lawyers for the Defendant
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